productivity and demand shocks that are disciplined by the data. This approach allows us to overcome previous criticism from …

substitution in consumption in order to account for the countercyclicality of the aggregate inventory-to-sales ratio in the data …

these conclusions by combining a theory based on nominal rigidities and storable goods with direct evidence on inventories … bring the model's inventory predictions in line with the data. The model consistent with salient features of the dynamics of …